Industrial metals: Prices surprisingly immune to weak US data

In the United States, initial jobless claims rose last week to an unprecedented level of 3.3 million due to the coronavirus. This is a foretaste of the poor economic data that will be released in the coming weeks and months. The US economy (like that of many other countries) is currently braking hard. Surprisingly, although unemployment data turned out to be far worse than expected, metal prices hardly reacted. They even increased slightly later. However, we warn against being too optimistic about it. We do not think that they can avoid the pressure of bad economic data in the long term and expect (significantly) lower prices in the coming months.

Steel prices have been relatively robust in recent weeks. This may be due to the fact that, according to industry circles, some wholesalers and end consumers have recently ordered larger quantities of steel, as they expect delivery difficulties in the future. Many steel buyers expect logistical problems in the course of combating the corona virus in Europe. In addition, more and more steel manufacturers are throttling their production - both on this side and across the Atlantic. How much this is reflected in the statistics of the World Steel Association is not yet clear. Because while many countries are shutting down, China is already on the way back to normal levels. Rising steel production there - it fell 5.1% on a daily basis in February compared to January according to data from the World Steel Federation - could offset the declines elsewhere. China represented 53% of global steel production in February.

Source: Commerzbank Research, Photo: Fotolia